What is Stewardship? Steward Leadership?

Posted by Matthew Thomas

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matthew-thomas-2.jpgReaders of this blog may have noticed the frequent attention paid to the term "Steward Leadership." In our work with leaders and businesses throughout the country and around the world, we find that a stewardship stance toward business makes a profound difference in that business' success on all levels. Without a strong sense of stewardship, businesses might still grow big and make lots of money, but their overall success as a business falters. That's why we find steward leadership so essential for organizations and their leaders as they transform for a vibrant future.

What do we mean by Stewardship?

Like what you're reading? Subscribe Now! Stewardship is an increasingly-used term that may still be more familiar in the non-profit and faith-based organizational world than it is in business. Stewardship derives from the concept that we are given something (owned by someone else) to manage on their behalf and make it fruitful or profitable for the owner, or expend it according to the owner's terms to the beneficiaries the owners have designated.


For those of us who are executives or managers who don't own an interest in the business we work in, this stewardship concept translates quite directly to the work we do: we work on behalf of an owner or owners to make it fruitful or profitable for the owners, or expend the resources we are given according to the owners' terms to benefit the owners' purpose.


For those of us who own our businesses (or part of our businesses), we take the concept of stewardship one more step forward. For us, we must, at minimum, approach our business as being a part of a shared world. The resources we consume came from someplace before us, and as we transform them or consume them, what is left behind will be left for someone else. This stewardship focuses on stewardship of our world: we are not the only people or creatures here, and we must keep everyone else's (and everything else's) interests well in mind.

Many steward leaders take one step beyond this to focus on how what they have they received from others, and they owe duty and gratitude to those who provided them with everything from their first job to their first big break to even their very lives. This stewardship focuses on paying it forward: we received benefit we want to amplify and pass on to others.

Some steward leaders focus on indirect stewardship: by investing in something that does not have an immediate monetary return (such as education grants, and so on), they are creating long-term benefit for themselves and others.

Some steward leaders focus on how their client or customer focus drives their business, and they must steward their customers' goodwill, experience, and the value the customers receive. It's not theirs, but they are entrusted to manage it. This aligns very closely with some of the non-profit approaches to stewardship.

Still other steward leaders focus on a more traditional sense of stewardship: that everything we have has come from  outside of ourselves and is owned by a being greater than ourselves. Often this can have religious, new age, or recovery community overtones. Like the others, this creates a sense of altruism in business. This sense of stewardship is often the most comprehensive, since it delineates that someone else owns everything a person touches - including their very life.

Common Characteristic 

That being said, all of these approaches to stewardship share the common characteristic that we are managing something that is not fully ours because others have a say in how it gets used, expended, or grown. All of these are approaches to being a steward leader who can do good in the community and the world while doing well. And that, in a nutshell, is a strong driver of the kinds of steward leadership in business we see that leads to success.


For more on organizational leadership, read Mark L. Vincent's fable, Wise Owl & Young Buck.

Wise Owl & Young Buck




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Topics: steward leaders, Matthew Thomas, steward leader, steward leadership

Steward Leadership through Courage

Posted by Matthew Thomas

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matthew-thomas-2.jpgCourage is a word that brings up a lot of strong images. Often these images are of military prowess, or of rescuing someone against all odds, or taking a stand against an overwhelming majority. These images help us see - and sometimes keep us from seeing. Plato's approach pulls our eyes in a different direction.


Plato has an interesting approach to courage - one that could help leaders who want to do good while doing well. He says that courage is a "belief concerning what is and what is not to be feared." (Republic IV.430, Modern Library edition (New York: Knopf, 1906, 1935, 1976, 1992).


Knowing what is to be feared - and what is not - helps us as we steward our organizations.


  • Like what you're reading? Subscribe Now! Courage, as such, keeps us from foolish risks. It also keeps us from being so risk averse that we get nothing done.
  • Courage, as Plato defines it, causes us to approach people for sales, marketing, or networking without playing on their base fears - their phobias and their "isms", in particular.
  • Courage presses us to do what is right, even when it is not convenient.
  • Courage even keeps us centered in lines of business that eschew using others' fears as leverage. We just don't sell people services or products based upon their irrational, unfounded fears. 
  • For those of us who work in consulting, courage gives us voice when those we are helping are stuck or spiraling.


As we have discussed these four civic virtues described by Plato (prudence, temperance, courage, justice), we have seen that they, while they may sound quaint to our ears, help us to counterbalance the prevailing sense of outrage that we often see. Moreover, they help us manage our organizations well.


As we consider courage, we realize that these four virtues may not yet complete the framework for solid steward leadership virtue. Three remain (but not of Platonic origin); we will discuss them presently.


I'm curious to see how you apply courage as you lead your organization.

How do you manage the use of virtue? If you wouldn't mind, e-mail me  and let me know how you see virtue at work.


We'd also like to provide you with a resource describing the balance of decision-making process: more reflective, or more active? Which way do you tend?


Tao of action-reflection, primer on process

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Topics: steward leaders, Matthew Thomas, steward leader, courageous, Leadership courage, virtue, courage

Steward Leadership Through Prudence

Posted by Matthew Thomas

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matthew-thomas-2.jpgLately, we've been talking about how Plato's four Civic Virtues are the basis for steward leadership of our organizations. We have looked at them generally, in the context of stewarding anger; and we have looked at temperance individually. Today, we look at prudence.


Prudence, or wisdom, should be a no-brainer for those of us in leadership. Wisdom applies not just to tactical leadership, but if we are to take Plato at face value (Republic, IV.428), wisdom applies to governing an organization - the overall policy-setting work, both as directed within the organization and out toward its clients, customers, constituents, or other stakeholders.


Like what you're reading? Subscribe Now! Prudence is enshrined in the law as applied to various areas of business life - representing the application of care and diligence as opposed to negligence. This has the tendency to bend our definition of prudence away from wisdom and wise policy design and toward risk management - which itself is often code for risk avoidance.


Prudence in a broader sense, however, carries with it much more than the risk management aspects of policy creation. It holds a spark - even a divine spark - of creativity in the application of knowledge, experience, and empathy to situations at hand in light of a vision for the future. Of course, this vision for the future must not either be too excessively apocalyptic or quotidian, in the first place, lest it lead us out of temperance or prudence altogether. More often than not, the reason prudence is so diminished is not due to a lack of knowledge or experience, but because the vision for the future is somehow distorted or dark. This is the greatest barrier to the full pursuit of prudence in organizational life.  


(Related: Doing Good while Doing Well)


So applying prudence to steward leadership of our organizations we find:


  • Creativity will be present
  • (Good) Vision gives us context
  • Decisions will be made with adequate reflection and also with timely execution


I'm curious to see how you apply prudence as you lead your organization.

How do you manage the use of virtue? If you wouldn't mind, e-mail me  and let me know how you see anger, and virtue at work.


We'd also like to provide you with a resource describing the balance of decision-making process: more reflective, or more active? Which way do you tend?


Tao of action-reflection, primer on process

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Topics: steward leaders, Matthew Thomas, steward leader, virtue, prudence, Plato, temperance

Steward Leadership Through Temperance

Posted by Matthew Thomas

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matthew-thomas-2.jpgTwo weeks ago, we reflected on what it means to be good stewards of anger. We concluded that virtue - a term we rarely hear these days - can inform our response to anger - whether our own or others'.


In Republic IV.427, Plato lists four civic virtues: prudence (or wisdom), courage (or bravery), temperance, and justice. Today, we are going to reflect on temperance as key to leadership. Temperance is a funny word with strong association to the movement in the 1920s United States to ban beverage alcohol; perhaps another word is better now (moderation or self-control come to mind); for now, though, we use it, if only to provoke reflection through unfamiliarity.


Like what you're reading? Subscribe Now! My 17-month-old son received a cardboard book about emotions as a Christmas gift this year. It describes how someone feels in different situations and then names those feelings. None of the emotions are judged; they are defined by example. Naming his emotions will help him in the first steps toward self-awareness. Eventually, he will be able to manage these emotions as they arise and respond to them. They will feel right in certain contexts, even as his response to those feelings changes.


Conventional wisdom says that what feels right is what we should do. This is commonly the philosophy of early adulthood as we explore new relationships, the freedoms of our newly-minted majority, and discover what delights, entertains, and attracts us.


(Related: Leadership - confidence, presence and curiosity)


Temperance takes a more seasoned approach to life. Temperance assumes that our desires and pleasures, while good, require some moderation. Some of that moderation is intensity, some is timing, some is boundary-setting. Temperance assumes that, as leaders, it is in our best interest to cultivate our will: our ability to choose what we do and when - and not merely to react. This tunes up our responses to reflect what we really want outside of the immediate moment, so that whether we tend toward reflection or tend toward going with our gut, there is a bit of space - a beat in time, perhaps - between our feelings and our actions.


We all know that reactivity is not leadership; it is the slave of circumstance and situation. Temperance works with our will so that our emotions, desires, and pleasures do not drive us to reactivity in ourselves - and even allow us to lead our own selves, not just others. Temperance allows us to express our emotions and desires in context and pursue pleasures to the degree they align with our overall values. This makes us whole, balanced people - an attractive leadership attribute.


(Related: Doing good while doing well)


As leaders we often have to make decisions in a split second. We don't necessarily have time to step back, close the doors, and reflect for a time. Temperance, and the disciplines that build it, gives us a much better chance of making good decisions. It's the worst feeling in the world to realize we made a decision out of anger, over-exuberance, fear, avoidance, or even greed, when we see the consequences burdening our present and future. Practicing the virtue of temperance gives us the space, even in the moment of emotion or desire, to make the right split-second decision that we won't regret (at least as much) down the road. Temperance gives both logic and emotion their place, but then allows both to defer to the will. This helps us to steward our organizations well.


I'm curious to see how you apply temperance as you lead your organization.

How do you manage the use of virtue? If you wouldn't mind, e-mail me  and let me know how you see anger, and virtue at work.


We'd also like to provide you with a resource describing the balance of decision-making process: more reflective, or more active? Which way do you tend?


Tao of action-reflection, primer on process


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Topics: leadership, steward leaders, Matthew Thomas, steward leader, leader, leaders, virtue, temperance

Steward Leaders: On Being Good Stewards of Anger

Posted by Matthew Thomas

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matthew-thomas-2.jpgA few weeks ago, a particularly monochromatic vessel for a typically-caffeinated beverage from a particular nationally-known dispenser of such beverages made the news. First, it made the news because someone was outraged by the vessel's blankness. Shortly thereafter, it made news because many others were outraged that someone would be outraged in the first place. Finally, there was outrage that the outrage about the outrage had carried on so long, and was so pointless.


As leaders, we quickly discover that anger is a powerful tool - as well as a disruptive presence. Our own anger can rally others to our cause - particularly when our anger resonates with others'; our own anger can create space between us and those who oppose us as well. Anger and outrage give us the simultaneous power of push and pull, as well as, in many cases, some kind of moral high ground.


Like what you're reading? Subscribe Now! In American political discourse of late, we see outrage used by leaders of all branches and levels of government, both in the election process and while in office. Outrage has become a competitive sport - who can be the most outraged about what, and say or do the most outrageous thing to bring their outrage to light. Outrage polarizes and partisanizes, and then becomes outraged at the gridlock that results.


Our workplaces are often conflicted - "office politics", some cry; others have a management-union split; still others bring political, philosophical, family, or religious conflicts into the workplace. These can generate anger and contention among workers that reduces our organizational capacity to meet our goals.


(Related: Doing Good While Doing Well)


Left unchecked, anger, outrage, and rage devour everything in their path - and often violently. Feeding on them isolates people into smaller and smaller units - even dividing people against their own selves.


Steward leadership urges us to steward anger as well. Anger is both natural and powerful. It can be channeled to accomplish good things. It is firmly an appropriate emotional response to injustice. That's where the moral high ground comes in.


Anger separates, drains, and exhausts. Its only sustenance is finding something else to consume and push away. As steward leaders, we find ways to use anger creatively to motivate toward healthy, sustainable action - not just to draw others into a malevolent maelstrom. We find ways of using anger to put an end to violence, rather than turning violence toward others.


These days, we hear little of virtue - the term itself seems a bit Quixotic to our ears. Yet, with the need to steward anger, it seems apt. Plato's civic virtues: prudence, courage, temperance, and justice (Republic IV.427e) all, in their own way, help us steward anger. Prudence, or wisdom, helps us to choose what really should motivate us to action. Courage, as Plato says, helps us choose what should and should not be feared (ibid., IV, 430b). Temperance makes sure we are not just driven by our desires, but our desires driven by our will. Justice leads us to true judgement and reconciliation, not just using (self-) righteous indignation as a proxy for making things right.


Perhaps these virtues are the missing piece to what to do with all of our outrage.


I'm curious to see how you steward anger in your organization. How do you manage the use of virtue? If you wouldn't mind, e-mail me  and let me know how you see anger, and virtue at work.


We'd also like to provide you with a resource describing the balance of decision-making process: more reflective, or more active? Which way do you tend?

Tao of action-reflection, primer on process

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Topics: steward leaders, Matthew Thomas, steward leader, steward leadership, virtue, Anger, Starbucks cup controversy

Steward Leadership: Financial reports and their roles

Posted by Matthew Thomas

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matthew-thomas-2Let's face it: the basic accounting reports generated by most accounting systems show where funds came in and where they went out; they show the balances on accounts; they show cash flow vs. revenue and expenses. All of these things look at what happened. This is important and essential information for determining whether something went as planned. It is also essential information for steward leaders to use to create new plans and generate projections as to what something might look like as the enterprise moves forward.


But reports that make the most sense to accountants and translate well onto tax forms and accounting systems aren't always the best reports to use to govern, develop strategy, manage, or procedurally maintain the work of an enterprise. For enterprises that have constituencies and stakeholders - and not just shareholders, owners, workers, and customers - reports must also make sense to what that audience needs.


Like what you're reading? Subscribe Now! For those in the governance and oversight roles of an enterprise - or even ownership role - traditional accounting reports tend to encourage leaders to govern by looking backwards into what was done, rather than forward into what is going to be done. Many times, these reports lead people into discussions of what should have been or what could have been, not into what can and should be done moving forward.


As the typical investment fund prospectus says, "past performance does not guarantee future results." Governance reports must spend appropriate time looking ahead, projecting revenues and expenses, cash flow and the overall business model's sustainability.


The traditional accounting reports are best classed as management reports. These reports help day-to-day management of funds according to budgets, purpose, and categories.  Nevertheless, even still, they often do not reflect the trends that most managers need to know. Typically, managers, too, need to look ahead, rather than behind. Looking behind only serves them insofar as they are able to hold others accountable and project forward toward goals. Depending on their level of management, some managers are more strategically-oriented, while others are more tactically-oriented. Good steward leadership suggests that these differing roles may require different reports.

 Get the   Five Types of Governance   resource today!

Finally, for those working in the financial procedural roles, many of the more technical accounting reports make the most sense to them: trial balances, vendor activity reports, and so on. The more typical accounting reports help them to see that everything is in good order before generating more strategic and analytical reports.


Design Group International's Financial Services Roles tool can help steward leaders determine which roles require which reports to best accomplish the enterprise's goals. The tool is free, and it may be downloaded by clicking the button below. 

Financial Roles Get the map!

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Topics: steward leaders, Matthew Thomas, steward leader, Financial Reporting, steward leadership, Financial roles

Steward Leadership: Power and Character

Posted by Matthew Thomas

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matthew-thomas-2.jpgAs I was growing up, people often told me that character was "what you do when nobody's looking." The typical examples were stealing something trifling, cheating at a game, or bullying a kid when the adults weren't around. Since these are things we know that some adults still struggle with, it's true that this demonstrates a degree of character.


Nevertheless, these days, I think it's more than that: today, I would say that character is what we do when we have power. Do we play to people's base fears and prejudices, or do we create space for learning and cooperation? How do we treat those who are less powerful than we - even those who are powerless? Do we recognize the advantages and privileges our power gives us, and use that awareness to leverage them on behalf of others? Or do we subject others to scrutiny that we would not want to have put on ourselves, were the shoe on the other foot?


Like what you're reading? Subscribe Now! When we find ourselves with the power to hire and fire, we hold great power over a person's - and often a family's - well-being. If we have the authority to arrest, detain, use lethal force, prosecute, or pronounce sentence, we hold even the power of life and death over others. Something as merely human and common as parenting involves a power relationship - one under constant refinement, negotiation, and growth. Thus, merely crossing the threshold into legal adulthood itself holds a degree of power.


Voting - as well as abstention from voting - whether in political elections or in the boardroom, is commonly top of mind as an expression of power, but it is not anywhere near the most common. I see three as much more common:


  • There is a power relationship between those traveling by automobile or truck and those traveling by most other means on the same road. (As a distance runner, I am keenly aware of who loses in an encounter with a motorized vehicle.)
  • Holding financial assets, often alongside higher incomes, grants significant power to act and to control.
  • Appearance is another: the freedom to carry oneself as one pleases, and act as one pleases, based in physical attractiveness, style of dress, grooming habits, or race/ethnicity/gender, is power that is not available to all in any society.


These power relationships are expressed far more often than voting (or abstention).


(Related: Doing Good While Doing Well)


As steward leaders of organizations, we probably already realize all of this. And self-awareness of our power, and the privileges it grants us, takes us a long way toward using power with character and integrity. So what do we do with our power? The fact that most of us do not become petty tyrants at home, in business, in office, and in our communities speaks to the stuff we are made of. I have seen many handle power well. Here are some marks of those who hold power with character:


  1. Courtesy. Falling into the "just because we can doesn't mean we should" category, courtesy acknowledges both our own power and another's dignity. It builds relationships and holds power in reserve.
  2. Attentiveness. Listening goes a long way. I have often heard it said that the first thing to go when someone gets power is their hearing. This is particularly the case when we have to listen to someone outside the "in-group", the inner circle, or even from an opposition party or enemy. Maintaining the ability to listen and nuance response expresses character with power.
  3. Acknowledgement. Having the humility to both acknowledge our own mistakes and champion the contributions of our team (and even of those who opposed us but whom we want to work with) reinforces courtesy and attentiveness to begin to truly lead, instead of merely controlling and manipulating.


So "What you do when you're alone" still fits the definition of character as the use of power, because secrecy holds power itself. But it isn't the whole story: power is where we really see what we are made of. In a news cycle full of the sound bites from leaders and candidates and memes on social media of who wants to do what to whom makes us more reflective. What kind of people do we want to be?


E-mail Matt Thomas


Design Group International has a resource for those in the action-reflection cycle. Check out the Tao of Action Reflection today!

Tao of action-reflection, primer on process


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Topics: leadership, steward leaders, steward leader, steward leadership

Steward Leaders: [Designing A Business] Client-Centeredness

Posted by Matthew Thomas

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matthew-thomas-2.jpgAs leaders who want to "Do Good while Doing Well," we care how the people around us feel, and we care about what they think. Whether employees, constituents, clients, customers, funders, or even the general public, people, and the impacts we have on communities of people, are important to us. Doing this implies a certain level of client- (or customer-, or constituent-, or member-) centeredness.

I can relate. I'm building my personal brand around client-centeredness. Our firm as a whole focuses on helping organizations and their leaders - which is inherently a client-centered position.

It's sometimes difficult to keep this focus, isn't it? And honestly, some of our best business advice, if taken to an extreme, pushes us off client-centeredness to a different orientation, for instance:

  • Focus on what you do well;
  • Keep overhead low;
  • Protect your intellectual property;
  • Help your clients/customers/constituents discover what they really need (even if they don't know they need it yet).

Like what you're reading? Subscribe Now! All of these things are good things. And, taken together, they are the hallmarks of good business. But unless client-centeredness is not just the "what" of our business, but also the "why," these good things can become very self-serving:

  • Focusing on what you do well can a focus on ourselves;
  • Keeping overhead low can become either cheap on the customer side or abusive on the employee side;
  • Protection of our property can make us grasping, militant, or litigious;
  • Helping people surface unknown or unrealized needs can cause customers to waste resources on trifles rather than truly gain value.

The "why" reminds us that we are client-centered not just because it's what we do, "we serve customers," but because the client (or customer or constituent, etc.) really matters. They become, at some level, the reason we exist. We are stewards of others' resources - not the least of which is customer trust.

(Related: The Story We Tell with Cost and Value)

When designing our businesses, we have choices as to where we start. We start with an idea; we start with a customer; we start with a product; we start with a value proposition; we start with an activity. Client-centeredness means that no matter what our starting point, at some stage of our business development we take a clear-eyed look at our business model and business plan and orient ourselves to the customer/client segments we have identified, and then build for them - not just to them. We build the kinds of relationships they need. We communicate and deliver value along channels they prefer, and we tailor our value propositions to their most essential jobs, desired gains, and most grievous pains.

Recently, I've been using a tool called the Business Model Canvas to help leaders think through their overall business design. (Don't worry, it's incredibly helpful for non-profits and other non-traditional organizational types as well!) It's not a tool we have designed ourselves - but we know a good one when we see it. Check it out here.

Once you've had a chance to sit and look at it, let's talk about how we could use it to assess and design client-centeredness in your business or organization.  Feel free to call me (toll-free) at 1.877.771.3330 x20, or e-mail me . I'd be glad to help you find simple, clear approaches to increasing your client-centeredness.


In service,


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Topics: client centered, business plan, steward leaders, steward leader, business design, business model, business models

Steward Leaders: [Non-profit Myths 6] Founders Control Boards

Posted by Matthew Thomas

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Since the end of September, we have been talking about the non-profit economy, and common myths operate within the public perception of non-profits. We've looked at the "free" business model as not just pertaining to non-profits. We have looked at six big myths: We have looked at "making money", and non-profits' responsibility for taxes. We've looked at how a non-profit can own a for-profit business. We looked at the deductibility of donations to non-profits. Last time around, we talked about how non-profits aren't the only organizations that can be designed to make the world a better place: "regular" businesses can, too.

Today, we address the sixth, and final, myth of this series. This myth is the myth of the permanent founder. Let's look at an example to see where this comes in to play.

A small group of colleagues and friends get together to form a non-profit to bring attention and solutions to a cause they care about. The most vocal spokesperson for the group becomes the Executive Director (ED); the rest become members of the Board. All of them contribute funds, time, and expertise to the non-profit. In compliance with best practices for non-profits, the ED is not a member of the Board, but present at all board meetings, with voice, but without vote.

Like what you're reading? Subscribe Now! All goes well for the first five years. By that point, the non-profit is up and running, and some of the original board members have begun to rotate off the board, bringing on new voices.

One of the new members of the Board sees an opportunity that they think the non-profit should take advantage of; the ED sees things otherwise - that this would be mission creep, a loss of priorities, etc.  A disagreement breaks out between the Board and the ED. 

The ED believes he is right, and because he gave of his own money to start the non-profit, feels slighted that the Board would de-prioritize one of the key aspects of the original vision, and move in a different direction. He pushes back on the board by talking to the remaining original members, and tries to get the new measure voted down.

The new measure passes, but the ED isn't done. He says this is a mistake, and that this violates the founding principles of the non-profit. (He had helped to select some of the very board members who now oppose him.) He urges those who disagree with him to step down. One does, and the board reverses course.

A few more years pass, and a similar situation emerges: this time, though it's the other way around. The ED has a new opportunity he wants to press. The Board sees things otherwise - that this would be mission creep, a loss of priorities, etc.  A disagreement breaks out between the Board and the ED. The ED believes he is right, and because he gave of his own money to start the non-profit, and continues to give heart and soul, underpaid, for the cause, feels slighted that the Board doesn't see this new opportunity as the natural result of the expanding vision. Once again, the ED pushes the board to see things his way. Most just put their heads down. Others drag their feet. One person begins active opposition to the ED.

The conflict drags on, and eventually a conflict management mediator is called in. They develop a set of mutually-agreed-upon priorities and procedures. But the founding ED sees this as appeasement, and begins to push back. The board, now emboldened by the mediation work, chooses to end their relationship with the ED and fire him - with a generous severance package (after all, they still like and respect him). They have decided it is time for a fresh start.

The ED is stunned. Never in a million years, he says, would he have thought this would have happened. The board is grieved, the cause is set back, and the ED, chastened, finds a new job eventually.


The myth that a founder can control a board, and therefore, dictate the terms of his or her own position, as well as who can be on the board and how they will vote, is built upon the experience of many when they deal with newly-established non-profits. Oftentimes, these are the dynamics that emerge. The founder is such a strong personality (as entrepreneurs must have) that the conflict seems all but inevitable. Most times, the board ends up getting more-or-less handpicked by the founder, and things maintain a sort of quasi-stasis for a long time. The founder outlasts many cycles of board members.

 (Related: Organizational Governance and the Bully in the Boardroom)

In the heady days of establishing a new organization to fill a need and promote a cause, it's hard to take the time to step back and get all the organizing documents and structures right. Design is not at the top of the mind, as form follows function. Nevertheless, good design from the outset can help dispel this myth that the founder can control a non-profit (much like the founder of a business might).

Designing roles into the first days of a non-profit reminds everyone that they are stewards of the cause, rather than owners. No one individual may privately gain from, or control a non-profit. Even when the founding board members and Executive Directors give deeply of themselves, that does not create the entitlement to control down the road. That just means they gave more than they were willing to give freely in those early days. Or perhaps they gave it freely in those days, but then began to feel used as the giving kept on going, perhaps with less enthusiasm. Whatever the case, good accountability and boundaries from the outset, designed into practices, attitudes, procedures, vision, and alignment can help avoid the rough scenario outlined above. That way, founders can do what they are good at: start things. Boards can do what they are good at: steadying things.

No one owns a non-profit; all are stewards. The myths we discussed over the past few weeks, we hope, will help steward leaders understand the dynamics of non-profits, whether they are part of one or view them from the outside.



What's your organization's story? I'd love to hear it. Feel free to call me at 1.877.771.3330 x20 or e-mail me by clicking the button.

E-mail Matt Thomas

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Topics: myth, nonprofit sector, steward leaders, Matthew Thomas, steward leader, non-profits, non-profit, steward leadership

Steward Leaders: [Non-profit Myths 5] Making the World a better place

Posted by Matthew Thomas

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One of the most significant myths we often encounter is that people who want to make the world a better place have to find work in the non-profit or public sectors of the economy.


Over the past several weeks, we have looked at some myths that operate within the public perception of non-profits. We've looked at how the "free" business model does not just pertain to non-profits. We have looked at "making money", and non-profits' responsibility for taxes. We've looked at how a non-profit can own a for-profit business. Last time around, we looked at the deductibility of donations to non-profits.


Like what you're reading? Subscribe Now! So do people who want to make the world a better place have to work in the non-profit or public sectors of the economy? Are careers in businesses and corporations somehow incapable of doing so, or work at cross-purposes to bettering our communities?


Increasingly, we are seeing businesses and corporations driven by mission and purpose beyond profit. These businesses seek to make the world a better place, invest in their communities, and contribute to causes that share their values - even while doing well for themselves. Some even establish their own non-profits to carry out some of their charitable work.


(Related: Non-profits that own for-profit businesses.)


The main difference between non-profits and businesses with this social enterprise bent is where the profits go on an annual basis or at the winding down of the company. Regular businesses deliver profits to their shareholders and are responsible to do so within the terms of the company's operating agreement. Non-profits are required to reinvest any surpluses into the non-profit for the furtherance of its mission.


Both types of company - "regular" businesses and non-profits - can benefit their communities through the way they treat their employees, customers, clients, vendors, and the resources they acquire and sell. Both types of company can express their values by what sorts of work they do (and won't do), and how they respond to the challenges they face.


So why choose a non-profit structure for business, versus a "regular" business or corporation?


Non-profits do well when any, or a combination of the following are in play:


  1. The business model to deliver services requires donor funding.
  2. The business model fits within one or more of the charitable purposes for which non-profits may be organized.
  3. The organization will be able to leverage more resources toward its cause by not providing profits to shareholders and by reinvesting surpluses into the continued mission of the organization.
  4. The perception or reality that making money off of providing a particular service or product is somehow unethical, even though that product or service is needed to further a charitable cause.


Alternatively, a business that has a social end in mind might want to organize as a "regular" business instead of a non-profit if any, or a combination of the following are in play:


  1. In order to achieve the social or charitable ends, the company must develop assets that could provide more resources to the cause if they could be profitably monetized. For instance, the patent royalties received for selling medical devices in Western Europe might provide the funding for charity medical care in medically underserved areas in Europe or on other continents, while also funding further research and development. (See also this article from Harvard Business Review.)
  2. The cause is not explicitly charitable, even if it will still make the world better (do a job, solve a problem, cause people to gain something intrinsically valuable), and even if it will strengthen charitable causes.
  3. The owners need to realize their investment in order to make a living and/or move the cause forward.


Note that these contrasting points say nothing about "just in it for the money" over against altruism or holy-mindedness. Both approaches can provide ways for people who desire to steward resources and better the world to go about achieving those ends.


What kind of world-bettering organization are you in? How is it set up? I'd love to hear your story.


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Topics: nonprofit sector, steward leaders, Matthew Thomas, steward leader, non-profits, non-profit, steward leadership